| BenefitsLink Retirement Plans Newsletter |   |
October 13, 2005
Today's sponsor: DATAIR Employee Benefit Systems, Inc.
(Click on company name or banner to learn more.)
| Software for DC/401(k) Plan Administration |
| DATAIR's IMPROVED BENEFIT ADMINISTRATION SOFTWARE for 401(k), Profit Sharing and all other Defined Contribution plans. Designed for administrators and consultants.
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| (Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor) |
Text of District Court Opinion of Summary Judgement for Directed Trustee of United's ESOP (PDF)
16 pages; dated Oct. 12, 2005. Excerpt: "We agree with the court's reasoning in In Re WorldCom, Inc. that 'a directed trustee's knowledge that a company's stock price and profits were declining and that the company was undergoing a restructuring' is not sufficient to find a breach of a fiduciary duty where the trustee continued to invest plan funds in the company's stock as directed." (U.S. District Court for the Northern District of Illinois)
Pension Reform-- Update Reflecting PSTA (PDF)
5 pages. Excerpt: "This summary compares the key provisions of the Pension Protection Act (PPA) and the Pension Security and Transparency Act (PSTA)." (Hewitt Associates)
CBO Cost Estimate for H.R. 2830, Pension Protection Act of 2005, As Revised September 26, 2005 (PDF)
13 pages. Excerpt: "H.R. 2830 would make changes to the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code (IRC) that would affect the operations of private pension plans. It would do so mostly by changing the funding requirements for tax qualified, defined-benefit pension plans and the premiums paid to the Pension BenefitGuaranty Corporation (PBGC)." (U.S. Congressional Budget Office)
JPMorgan Says Corporate Pension Underfunding Improves
Excerpt: "U.S. corporate pension plans were underfunded by an average of 12% at the end of 2004, down from about 13% at the end of the 2003, according to a new JPMorgan Investment Management study. The average contribution rate increased to 5.2% in 2004 from 4.8% in 2003, and 81% of the corporations in the study were underfunded to a certain degree, a figure that remained unchanged from 2003." (Pensions & Investments Online; one-time registration required)
Editorial: Passing the Bucks -- The Pension Funding Issue and PBGC
Excerpt: "[T]here are issues here that go well beyond whether a bankrup.tcy judge lets Delphi foist its obligations to retirees onto the government fund and its former parent company, G.M. Once again, a giant corporation has not put enough money into its pension fund, to the tune of at least $4 billion. The automobile industry appears poised to follow the steel companies and the airlines as the latest to jeopardize the security of retirees." (The New York Times; one-time registration required)
Bad 401(k)? Sue Employer
Excerpt: "Under the main U.S. retirement law called ERISA, employers who offer 401(k)-type plans can get a break called a '404(c) election.' If employers take this route, abide by the rules, and review money managers selected for the plan, they can pass legal responsibility for picking investments directly to their employees. These plans are called 'participant directed.'" (The Northwest Herald)
Lack of Small Business 401(k)s Is a Major Challenge for Their Workers
Excerpt: "Roughly half of workers employed by small businesses don't have a 401(k) plan. Translation: about 25 million Americans don't have the ability to save for retirement in an employer-sponsored pension plan." (MarketWatch, Inc. via Investor's Business Daily)
Pennsylvania Pension Data Leave Questions about Returns
Excerpt: "As pension funds shift more assets to 'alternative' investments that don't trade on stock or bond markets, it's getting harder to tell what they're really worth - or how big a subsidy they'll need to provide pensions to future retirees. For example, take the Pennsylvania Public School Employees' Retirement System, which, at The Inquirer's request, has disclosed some of the performance data it uses in estimating its profits from nearly 100 private-equity and venture-capital funds." (The Philadelphia Inquirer; one-time registration required)
Bond Yields Bounce Back in September -- Effect on Funded Status of Pension Plans (PDF)
4 pages. Excerpt: "Pension plan liabilities under FAS 87 are measured based on yields available on high quality corporate bonds as of the measurement date. Using our RATE:Link methodology -- which matches high-quality corporate rates to projected cash flows -- the discount rate for our benchmark plan increased 37 basis points for the month, to 5.65%." (Towers Perrin)
Overview: Hurricane Rita Affects Retirement Plan Administration (PDF)
4 pages. Excerpt: "This information applies to sponsors of qualified pension, profit sharing and stock bonus plans, including 401(k) plans, multiemployer plans, governmental plans and church plans. It also applies to ERISA 403(b) plans and non-ERISA 403(b) programs, and to governmental section 457 plans." (Prudential Retirement)
The Man's Pension Plan -- The Isle of Man, That Is
Excerpt: "Offshore: Retirement options for the globally mobile are becoming more of an issue, as companies relocate staff in order to remain competitive. Philip Games reports on what the Isle of Man has been doing to attract international pension schemes." (Legal Week)
Divining the Future of Socially Responsible Investing
Excerpt: "A study commissioned by Vancity Credit Union [surveyed] 42 SRI thought leaders to identify trends, opportunities, and obstacles, as well as potential developments that defy prediction." (SocialFunds.com)
Retirement Savings and Financial Literacy: Two Issues at the 2005 White House Conference on Aging
Excerpt: "These were two [of the topics] of the ten mini-conferences leading to the White House Conference on Aging, which will be held December 11-14, 2005. .... The full reports that were submitted are available at: http://www.whcoa.gov/about/policy/meetings/mini-conferences.asp." (International Foundation of Employee Benefit Plans)
Disaster Relief Relating to PBGC Deadlines in Response to Wyoming Tornado
Excerpt: "The Pension Benefit Guaranty Corporation is waiving certain penalties and extending certain deadlines in response to the major disaster declared by the President of the United States on account of the tornado that occurred on August 12, 2005, in Campbell County, Wyoming." (U.S. Pension Benefit Guaranty Corporation)
Helping Participants Understand the Benefits of Their Retirement Plan
Excerpt: "Question: How can I use my retirement plan enrollment meetings to help participants understand the benefits of investing in their retirement plan?" (Financial Finesse via 301khelpcenter.com)
Links to Items on Executive Comp, Benefits in General
Employers Should Take Care In Designing Early Retirement Incentive Programs
Excerpt: "It is not uncommon for employers to offer early retirement incentive programs encouraging eligible employees to retire sooner than they otherwise might. A recent decision by the Eighth Circuit Court of Appeals serves as a useful reminder that such programs need to be carefully designed so that they do not violate the Age Discrimination in Employment Act (the 'ADEA')." (Faegre & Benson LLP)
Overview: Notice 2005-45 -- The IRS Takes Aim at Executives' Entertainment Use of Company Aircraft (PDF)
11 pages. Excerpt: "This article summarizes the main points of the Notice, which took effect on July 1, with particular attention to the issues raised by the new expense allocation method and its application." (Miller & Chevalier Chartered)
12 Action Steps on the Deferred Compensation Regulations (PDF)
3 pages. Excerpt: "[The Groom Law Group provides] a summary of the key new guidance in the regulations, and [describes] steps that employers should take soon." (Groom Law Group)
Overview: Proposed IRS Regulations for IRC Section 409A Provide Reasonable Framework (PDF)
17 pages. Excerpt: "On September 29th, the IRS issued long-awaited proposed regulations under Internal Revenue Code section 409A. 70 Fed. Reg. 57930 .... The regulations primarily provide guidance on the scope of section 409A, as well as the rules for deferral elections and distributions under plans subject to section 409A. As widely reported, the regulations also extend most, but not all, of the transition relief for section 409A compliance an additional 12 months to December 31, 2006." (Groom Law Group)
Overview: Proposed Deferred Compensation (409A) Regulations -- Focus On SERPs
Excerpt: "On October 4, 2005, Treasury published proposed regulations under Tax Code section 409A, relating to the taxation of nonqualified deferred compensation. In this article, we are going to focus on issues relating to retirement plans." (Chicago Consulting Actuaries, LLC)
Union Advantage for Benefits Grows Wider
Excerpt: "Union workers receive employer-paid benefits that far exceed the benefits employers provide for nonunion workers, and the union advantage is growing wider. For years, employers have been canceling benefit coverage and shifting more of the remaining costs to workers. Unions have been able to fight off this employer attack on benefits, but nonunion workers have been left with inadequate health care protections and no retirement security." (Labor Research Association via PoliticalAffairs.net)
Newly Posted Events
Correction Methods Under the "New" Employee Plans Compliance Resolution System ("EPCRS")
in Ohio on October 25, 2005
presented by ASPPA Benefits Council of Greater Cincinnati
Processing Benefits Claims and Appeals for Self-Funded Health Plans, Health FSAs, and HRAs: How to Make Plan Decisions That Stand Up to Scrutiny
Nationwide on June 30, 2005
presented by Employee Benefits Institute of America Inc. (EBIA)
Newly Posted Press Releases
Two Step Announces New AmLaw 100 and Investment Company Customers; Leading Law Firms and Private Equity and Technology Company Legal Departments Sign On As New Customers
(Two-Step Software, Inc.)
Taxing health benefits will add costs, discourage coverage, says American Benefits Council
(American Benefits Council)
Ameriprise Retirement Services to Host President's Council
(Ameriprise Retirement Services)
Newly Established Bidwell Consulting Services, Inc. off to a Great Start!
(Bidwell Consulting Services, Inc.)
Movers and Shakers: Newly Posted Announcements of Promotions and New Personnel
(Post Yours!)
Rene Otten
(Bidwell Consulting Services, Inc.)
Newly Posted or Renewed Job Openings
401(k) Enroller (Bi-Lingual)
for 401(k) Advisors
in CA
401(k) Employee Communications Specialist (Bi-Lingual)
for 401(k) Advisors
in CA
Retirement Plan Consultant
for Invesmart, Inc,
in WA
Employer Support Specialist
for ICMA-RC : Building Retirement Security
in DC
Senior Product Management Consultant
for New York Life Insurance Company
in NY
Case Manager - ERISA
for CitiStreet
in NJ
Manager, Corporate Defined Contribution & Retiree Health & Welfare Plans
for Raytheon Company
in MA
Retirement Solutions Proposal Manager
for CUNA Mutual Group
in WI
Senior Defined Benefit Plan Administrator and Consultant
for Bay Area Pension Administration and Consulting Firm
in CA
Compliance Analyst
for General Board of Pension & Health Benefits of the United Methodist Church
in IL
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